05 Oct Do I have to use ANCHOR to pay for property taxes?

Q. I’m eager to get my ANCHOR check. But I’m confused. I pay my property taxes through escrow with my mortgage company. Do I have to use the money for taxes?
— Homeowner

A. No.

ANCHOR stands for Affordable New Jersey Communities for Homeowners and Renters, and it’s the state’s attempt to help tenants and homeowners offset New Jersey’s sky-high real estate taxes.

But you can use the money for anything.

If you wanted to use it for property taxes, you could tell your bank to put it in your escrow account, but that won’t lower your mortgage payment automatically. Your property taxes are factored into your payment, so extra money put into the escrow account would probably lower your mortgage payment for the next year, but after that, if you don’t keep adding to the escrow account, you could see the monthly mortgage payment take a big jump.

You could use the money to lower the balance of your mortgage, though, or stick it into a savings account to bolster your emergency fund.

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This story was originally published on Oct. 5, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.